10 AI Stocks to Watch for the Rest of 2024

4. Alphabet Inc (NASDAQ:GOOG)

Number of Hedge Fund Investors: 165

Jim Cramer in a latest program on CNBC said he is “concerned” about Alphabet Inc (NASDAQ:GOOG)’s ability to keep posting strong earnings because of some core issues. Cramer said his charitable trust owns “some” Alphabet Inc (NASDAQ:GOOG) shares.

“The government has made it much harder to own it with this antitrust lawsuit. I’m also concerned about Alphabet’s ability to keep putting up strong earnings. It has become more of a media business and is in a very competitive space.”

Despite constant alarms going off about its search business, Alphabet Inc Class C (NASDAQ:GOOG) search revenue jumped about 13.7% in the second quarter year over year. As of the end of June, Google has about 91.06% share of the search engine market, just 1.65% lower than the December 2019 levels.  With AI overviews and other search initiatives, Alphabet Inc Class C (NASDAQ:GOOG) will be able to stave off any competitors given its dominance in the market. According to StatCounter report, Bing search engine’s market share only increased from 3.03% in August 2023 to 3.91% in August 2024. This shows MSFT has not been able to make any notable dent in Google’s market share.

Cloud and YouTube are two key strong catalysts for Alphabet Inc Class C (NASDAQ:GOOG) shares. During the second quarter, Alphabet’s Cloud revenue rose 28.8% to $10.35 billion, crushing past analysts’ forecasts of $10.16 billion. Alphabet Inc Class C (NASDAQ:GOOG)  is on the path to reach a $100 billion revenue run-rate from YouTube Ads and Google Cloud by the end of 2024.

Oakmark Select Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) was the top detractor during the quarter. The U.S.-based communication services company’s stock price fell after a U.S. District Court ruled that Google violated Section 2 of the Sherman Act by maintaining a monopoly in general search engine services via exclusive distribution agreements. We think this case is unlikely to hurt Alphabet’s valuation over the long term as regulations previously en[1]acted in the European Union to address similar issues did not materially erode the company’s market share. We continue to believe that Alphabet is an attractive investment.”